All eyes are on the Middle East to determine the immediate future for Crude. We suggest buying dips in April and May contracts and see the 50 day and 100 day MA's as support. A close above yesterdays high to me signals a move to $100/barrel on WTI. If we see that appreciation higher it is highly recommended that hedges should be in place in heating oil and RBOB. Clients remain on the sidelines in natural gas looking for a lower long entry. My take is nat gas is a buy near $4 and a sell near $5. A fresh 2011 high in the indices today on positive economic numbers. I've thrown in the towel trying to pick a top for clients and now wait for retracement to cut losses on shorts. The 20 day MA remains the pivot point; in the S&P at 1280 and in the Dow at 11770. The dollar broke down nearly 1% today posting a new 2011 low. We were wrong expecting a dead cat bounce and would remain defensive being the dollar does not appear to act as the flight to quality it had been in recent months. On a pullback in the coming sessions exit remaining shorts in the Pound, Euro and Loonie. Tomorrow look for bullish trade recommendations in April and June live cattle...ideally we get a pullback. Silver traded higher by 1.25% today lifting prices back near the 50 day MA. We suggest having bullish exposure thinking a trade back to $30/ounce should come in quick order. It will take a move back over the 100 day MA in April gold at $1358 for us to truly want to have clients long with any size. The 3/2 or even 2/2 silver/gold ratio trade could be a viable strategy. Clients want to be positioned long ahead of next weeks USDA report but ideally on a trade lower in new crop corn and soybeans. We've yet to make a move but as prices race higher we're less then pleased having NO exposure with most of our clients. Its nerve racking selling into the strength in coffee and cotton but sometimes those are the best trades. Until we get confirmation of an interim top though we would suggest options and not futures.
Risk Disclosure: The risk of loss in trading commodity futures and options can be substantial. Past performance is no guarantee of future trading results
By: Matthew Bradbard
Head Trader, MB Wealth Corp.
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